formulas Flashcards
Revenue
Selling price x Number of units sold
Total Costs
Fixed costs + Variable costs
Variable costs (Total variable costs)
Variable cost per unit x Number of units sold
Profit
Total Revenue - Total Costs
OR
Total contribution - Fixed Costs
Market Capitalisation of a business
Number of issued shares x current share price
Expected Value of a decision with two possible outcomes A or B
[Pay off of A x probability of A] + [Pay off of B x probability of B]
Net Gain
Expected Value - initial cost of decision
Market Growth (%)
Change on the size of the market over a period / Original size of the market x100
Market Share (%)
Sales of one product OR brand OR business / Total sales in the market x 100
Added Value
Sales Revenue - Cost of the bought in goods and services
Labour Productivity
Output over a time period / Number of Enployees
Unit Costs (average costs)
Total Costs / Number of Units of Output
Capacity Utilisation (%)
Actual Output / Maximum Possible Output x 100
Return On Investment (%)
Profit from the Investment / Cost of the Investment
Gross Profit
Revenue - Cost of sales
Profit From Operations
Operating profit = Gross profit - Operating expenses
Profit for year
Operating profit + Profit from other Activities - Net Finance Costs - Tax
Gross Profit Margin (%)
Gross Profit / Revenue x100
Profit from operations margin (%)
Operating profit / Revenue x 100
Profit for Year margin (%)
Profit for year / Revenue x 100
Variance
Budgeted figure - actual figure
Contribution per unit
Selling Price - Variable costs per unit
Total Contribution
Contribution per Unit x Units Sold
OR
Total Revenue - Total Variable Costs
Break-Even output
Fixed Costs / Contribution per Unit
Margin Of Safety
Actual level of output - Break-even level of output
Labour Turnover (%)
Number of staff leaving / Number of Staff Employed by the Business x 100
Employee Retention Rate (%) for a Particular time period
Number of Employees who remained with the Business for the whole period of time / Number of Employees at start of the time period x 100
Employee Costs as percentage of turnover
Employee Costs / Turnover x 100
Labour Costs per unit
Labour Costs / Units of output
Return on Capital Employed (ROCE)(%)
Operating profit / Total Equity + non-current liabilities x 100
where total equity + non-current liabilities= capital employed
Current Ratio
Current assets / Current Liabilities
Gearing (%)
Non-current liabilities / Total equity + non-current liabilities x100
where total equity + non current liabilities = capital employed
Payables days
Payables / Cost of Sales x 365
Receivables Days
Receivables / Revenue x365
Inventory turnover
Cost of Sales / Average inventories held
Average Rate of return (%)
Average annual return / Initial cost of project x100
